Does freedom of testation supersede the powers of the board of trustees to allocate a death benefit in terms of section 37C of the Pension Funds Act, 24 of 1956?

Abstract:

Section 37C of the Pension Funds Act was introduced primarily to ensure that
death benefits are paid in accordance with the object of the Act and
government policy. Its purpose is to make sure that the dependants of the
deceased member are not left destitute upon the death of the member. In
order to achieve this, the death benefits are placed under the control of the
trustees who are tasked with the duty to distribute the benefits equitably
among the beneficiaries. According to this section, death benefits do not form
part of the deceased’s estate and as a result a beneficiary under the last will
and testament of the deceased is not necessarily a beneficiary under section
37C of the Act. The board of trustees will consider a person as a beneficiary if
the deceased member has nominated such a person in a valid nomination
form. This section therefore overrides the deceased’s freedom of testation
because the board of trustees are not bound by the deceased’s wishes as
completed in the nomination form. A nomination form is one of the factors
which the trustees have to consider in the exercise of their discretion to make
an equitable distribution.